Eurada News nº385 - February 2019

Prepare your Companiesfor Brexit

Brexit will probably happen next 29th March 2019. Preparing for the withdrawal is not just a matter for EU Institutions and national authorities but also for private entities. All the services of the European Commission concerned have drafted “preparedness notices” that are really useful for Development Agencies and their stakeholders to help the companies to readapt themselves to the changes caused by Brexit.

Preparedness notices are documents written by European Commission Departments on how Brexit would change law and policy in their areas of work. These documents are important since all Union´s primary and secondary legislation will cease to apply to the United Kingdom in the event of leaving the European Union next 29th March 2019, as the United Kingdom will then become a third country for all purposes. These notices are written to prepare citizens, companies and stakeholders for the withdrawal of the United Kingdom, setting out the specific consequences and remedies in a comprehensive range of policy areas.The position of the European Union is to protect the integrity of the single market. Accordingly, it is not possible to allow one of the EU members to leave the Union and continue being at the same time part of the single market. The negotiations will focus on the elaboration of a customised agreement with that country that would be acceptable for both sides. Nowadays, the main aspect that affects the single market is the discussion of the Ireland and Northern Ireland border as it will become an external EU border. The position of the EU is fully aligned with the interests of Ireland because it is an EU member.

During the last months it was possible reach an agreement between the EU and the government led by Ms Theresa May (the British Prime Minister); both parties agreed that there will not be a hard border between Ireland and Northern Ireland. This is a key issue for internal market food safety, industrial equipment, anti-dumping or residues regulations. One of the solutions proposed was to use technology and self-declarations in origin to avoid the border checks. However, after the rejection of the deal by the British Parliament any scenario is possible. From the point of view of the companies an easy implementation of the border checks would be beneficial; nowadays, new technologies facilitate the customs declaration from the companies’ warehouses without the need of a strong border control.

Companies should be prepared for any contingency because the “no-deal” is still a possibility and it may have strong implications. A transition period between 30 March 2019 and 31 December 2020 may be agreed, but this is not certain at this stage. The European Council therefore called to continue the work on preparedness at all levels for the consequences of the United Kingdom’s withdrawal, considering all possible outcomes. The notices of the Commission services published respond to that request. Most of them are published in 22 languages to facilitate the diffusion. These preparedness notices set out the consequences of the withdrawal of the United Kingdom from the European Union without a formal, ratified agreement between the United Kingdom and the European Union. Please find them in the links below.